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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended December 31, 1997
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission File Number 1-11706
CARRAMERICA REALTY CORPORATION
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(Exact name of registrant as specified in its charter)
Maryland 52-1796339
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(State of Incorporation) (I.R.S. Employer Identification No.)
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
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Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (202) 624-7500
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
- ------------------- -----------------------------------------
Common Stock, $0.01 Par Value New York Stock Exchange
Series B Cumulative Redeemable
Preferred Stock, $0.01 Par Value New York Stock Exchange
Series C Depositary Cumulative
Redeemable Preferred Stock,
$0.001 Par Value New York Stock Exchange
Series D Depositary Cumulative
Redeemable Preferred Stock,
$0.001 Par Value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. |X|
As of March 4, 1998, the aggregate market value of the 32,403,511
shares of Common Stock held by non-affiliates of the registrant was
approximately $964.0 million, based upon the closing price of $29.75 on the New
York Stock Exchange composite tape on such date.
Number of shares of Common Stock outstanding as of March 4, 1998: 59,997,486
DOCUMENTS INCORPORATED BY REFERENCE: Portions of the proxy statement for the
Annual Stockholders Meeting to be held in 1998 are incorporated by reference
into Part III.
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PART 1
Item 1. BUSINESS
THE COMPANY
General
CarrAmerica Realty Corporation (the "Company") is a fully integrated,
self-administered and self-managed publicly traded real estate investment trust
("REIT") that focuses primarily on the acquisition, development, ownership and
operation of office properties in select suburban growth markets across the
United States. As of March 1, 1998, the Company owned a greater than 50%
interest in a portfolio of 256 operating office properties, and 41 properties
under construction. These 256 operating properties contain an aggregate of
approximately 19.9 million square feet and the 41 properties under construction
will contain approximately 3.7 million square feet. The operating properties
owned by the Company as of December 31, 1997 were 95.9% leased as of that date,
with approximately 1,400 tenants.
The Company and its predecessor, The Oliver Carr Company ("OCCO"), have
developed, owned and operated office buildings in the Washington, D.C.
metropolitan area for more than 35 years. In November 1995, the Company
announced a strategic alliance with a wholly-owned subsidiary of Security
Capital U.S. Realty (together with Security Capital U.S. Realty, "SC-USREALTY"),
a European real estate operating company which owns strategic positions in
selected real estate companies in the United States. As of February 28, 1998,
SC-USREALTY owned approximately 44.1% of the outstanding common stock of the
Company (39.3% on a fully diluted basis).
The Company's experienced staff of over 1,200 employees, including
approximately 900 on-site building employees, provides a broad range of real
estate services. The Company's principal executive offices are located at 1700
Pennsylvania Avenue, N.W., Washington, D.C. 20006, and its telephone number is
(202) 624-7500. After July 1, 1998 the Company's principal offices will be
located at 1850 K Street, N.W., Washington, D.C. 20006 and its telephone number
will be (202) 729-7500. The Company's web site can be found at
www.carramerica.com. The Company was organized as a Maryland corporation on July
9, 1992.
Business Strategy
The Company's primary business objectives are to achieve long-term
sustainable per share cash flow growth and to maximize stockholder value through
a strategy of (i) acquiring, developing, owning and operating office properties
primarily in suburban markets throughout the United States that exhibit strong,
long-term growth characteristics and (ii) maintaining and enhancing a national
operating system that provides corporate users of office space with a mix of
products and services to meet their workplace needs at both the national and
local level. The Company has focused its investments primarily in suburban
markets throughout the United States because it believes that the suburban
markets provide growth oriented companies and their employees with workplace
locations which have lower operating costs, greater convenience and a higher
quality of life than traditional central business district locations.
Target Markets. The Company has focused its acquisition and development
activity in markets of the United States, which generally possess strong
long-term growth characteristics. Within these markets, the Company is targeting
specific submarkets in which (i) operating costs for businesses are relatively
low, (ii) long-term population and job growth generally are expected to exceed
the national average, (iii) large, well-educated employment pools exist, and
(iv) barriers to entry exist for new supplies of office space. The Company has
established a local presence in each of its existing target markets through its
investment activity and through relationships established by its experienced
market officers. The Company's target markets include the following: Suburban
Atlanta, Suburban Austin, Suburban Chicago, Suburban Dallas, Southeast Denver,
Tampa, Florida, Boca Raton, Florida, Orange County/Los Angeles, Suburban
Phoenix, Suburban Portland, Oregon, Sacramento, Suburban Salt Lake City, San
Diego, San Francisco Bay Area, Suburban Seattle and metropolitan Washington,
D.C.
2
For each identified target market, the Company has established a set of
general guidelines and physical characteristics to evaluate investment
opportunities. All investment decisions are driven by real estate research,
focusing on variables such as composition of economic base, rate and composition
of job growth and office space supply and demand fundamentals. During 1997, the
Company believes that it met its critical mass threshold in substantially all of
its target markets. By achieving such critical mass, the Company believes that
it is able to better serve its customers' needs, realize certain operating
efficiencies and achieve sustainable long-term per share cash flow growth and
maximize stockholder value.
As of December 31, 1997 the distribution of the Company's operating
properties (on a rentable square foot basis) was as follows: 38% in its Pacific
region, primarily in suburban Seattle and the California markets of Silicon
Valley, Pleasanton, San Mateo, Orange County, Los Angeles and San Diego; 31% in
its Southeast region, primarily in metropolitan Washington, D.C., suburban
Atlanta and Boca Raton, Florida; 14% in its Mountain region, primarily in
suburban Salt Lake City, southeast Denver and suburban Phoenix; and 17% in its
Central region, primarily in suburban Chicago, suburban Dallas and suburban
Austin. Downtown Washington, D.C., which represented 100% of the Company's
portfolio in 1993, accounted for approximately 13% of the Company's portfolio
(on a rentable square foot basis) as of December 31, 1997.
Operating Property Acquisitions. In November 1995, the Company
implemented a major initiative to acquire operating office properties in order
to establish the operating platform for its national business strategy. Between
January 1, 1996 and March 1, 1998, the Company acquired 241 operating properties
containing approximately 16.7 million square feet, resulting in an approximate
500% increase in the total square footage of operating properties in which the
Company has a majority interest. These properties were acquired for an aggregate
purchase price of approximately $1.9 billion.
Development Program. Development of office properties is an
increasingly important component of the Company's growth strategy as attractive
acquisition opportunities diminish due to the influx of capital into the office
property market. The Company believes that long-term investment returns
resulting from properties it develops generally will exceed those from
properties it acquires, and the Company will not assume significantly increased
investment risks. The Company minimizes its development risk by employing
extensively trained and experienced development personnel, by avoiding the
assumption of significant entitlement risk in conjunction with land acquisitions
and by entering into guaranteed maximum price (GMP) construction contracts with
seasoned and credible contractors. Most importantly, the Company carefully
analyzes the supply and demand characteristics of a target market before
commencing inventory development in the market. In general, the Company will
only undertake inventory development (which excludes properties under
construction that have been substantially pre-leased) in markets with strong
real estate fundamentals, and then the Company generally will construct office
buildings attractive to a wide range of office users. The Company's
research-driven development program enables it to tailor its development
activities in each target market, from inventory development, to build-to-suit
projects, to holding land for future development. From January 1, 1997 to March
1, 1998, the Company placed in service nine development properties containing
approximately 780,000 square feet. The total cost of these development
properties was $99.1 million and the Company expects that the first year
stabilized unlevered return of these properties will be 11.7%. In addition, as
of March 1, 1998, the Company had an additional 41 properties under construction
that will contain approximately 3.7 million square feet.
Investments in Land Held for Future Development. The Company believes
that acquiring land to support future development provides it with a competitive
advantage in responding to customers' needs for office space in markets with low
vacancy rates, barriers to entry for new supplies of office space and increasing
rental rates. The Company also believes that the long-term investment returns
available to it on office properties it develops generally will exceed those of
office property acquisition opportunities currently available to the Company. In
addition to its portfolio of operating properties and projects currently under
development, the Company owned or controlled, as of March 1, 1998, land in 15 of
its target markets that is expected to support future development of up to 5.9
million square feet. The Company believes that acquiring land to support future
development provides it with a competitive advantage in responding to customers'
needs for office space in markets with low vacancy rates.
3
National Operating System. As part of its business strategy, the
Company has developed and will continue to enhance a national operating system
to provide nationally coordinated customer service, marketing and development.
The Company's national operating system consists of three components: (i) a
Market Officer Group, currently consisting of 11 market officers focused on
developing and maintaining strong local relationships with the Company's
customers and the brokerage community and identifying investment opportunities
for the Company; (ii) a Corporate Services Group, which is dedicated to
marketing the Company's office space to a targeted list of companies; and
(iii) a National Development Group, which is responsible for developing office
properties, build-to-suit facilities and business parks. The Company's national
operating system is designed to provide corporate users of office space with a
mix of products and services to meet their workplace needs at both the national
and local levels. The Company believes that through its existing portfolio of
operating properties, property development opportunities and land acquired and
currently held for future development, the Company can generate incremental
demand through the relocation and expansion needs of many of its customers, both
within a single target market and in multiple target markets.
Market Officer Group. The Market Officer Group currently consists of 11
market officers who cover the 16 target markets in which the Company currently
owns properties. These market officers are responsible for maximizing the
performance of the Company's properties in their markets and ensuring that the
needs of the Company's customers are consistently being met. Because they meet
with the Company's customers on a regular basis, market officers are cognizant
of and responsive to customers' relocation or expansion needs. The market
officers have extensive knowledge of local conditions in their respective
markets and, therefore, are invaluable in identifying attractive investment
opportunities in their markets. In addition, through their contact with
customers, market officers are well positioned to help the Corporate Services
Group identify customers with new build-to-suit and multi-market requirements.
Corporate Services Group. The Company established the Corporate
Services Group in 1997. This group is responsible for marketing the Company's
properties, build-to-suit capabilities and the national scope of the Company's
operations to a targeted list of major corporate users. The Corporate Services
Group acts as a primary point of contact for national customers, coordinating
all of the office space the Company offers and giving corporate customers the
opportunity to address their national space requirements efficiently and
economically.
National Development Group. The National Development Group is
responsible for developing suburban office properties, build-to-suit facilities
and business parks. The Company's development team currently has over 40
professionals consisting of architects, engineers and construction professionals
across the United States who have an average of over 15 years of experience
developing office properties. This team of development professionals oversees
every aspect of the Company's land planning, building design, construction and
development of office properties, ensuring that all projects meet the same high
standards and uniform specifications in building design and systems. The Company
believes that, the National Development Group's expertise has given the Company
a competitive edge in marketing its facilities and services to customers.
Executive Office Suites Business. In August 1997, OmniOffices, Inc.
("OmniOffices"), an affiliate of the Company, acquired substantially all of the
assets of OmniOffices Group, Inc. and its subsidiaries for an aggregate purchase
price of approximately $50 million in cash. These assets included 28 executive
office suite centers containing approximately 1,650 office suites located in 14
markets across the country. In addition, OmniOffices has acquired an additional
10 executive office suite centers, and entered into an agreement to acquire
(subject to certain closing conditions) an additional 22 executive office suite
centers (although there can be no assurance that this pending acquisition will
be consummated), for an aggregate cash investment of approximately $88 million.
These additional 32 executive office suite centers contain approximately 2,300
office suites located primarily in New York City, San Francisco, Chicago, Tampa,
Indianapolis and San Diego, and are operated by the two largest franchisees of
the HQ(R) executive office suite network, the largest operator of executive
suites.
4
The "executive office suites" business typically involves leasing
20,000 to 30,000 square feet of an office building from the owner and outfitting
that space with 60-70 individual offices (known as office suites) that are
leased on a relatively short-term basis (i.e., one year or less) to customers
who generally utilize one to three offices at a time. OmniOffices generally
provides these customers with administrative support services (e.g.,
secretarial, duplicating, fax and receptionist services), conference and
training facilities, video conferencing, travel arrangements and catering
arrangements. The Company believes that approximately 60% of the current demand
being generated for executive office suites originates from national and
multi-national companies. The Company believes that this line of business has
significant potential for growth because the demand for executive office suites
is likely to increase as companies seek greater flexibility and alternative
workplace solutions for their staffing and business plan requirements. The
Company believes that its position as the only national office property owner
and operator providing both traditional, long-term office space and (through
OmniOffices) flexible, short-term workplace options provides it with a
competitive advantage in meeting the evolving needs of growing companies.
OmniOffices expects to continue expanding its operations through a
program encompassing both acquisitions and the creation of new executive office
suite centers. OmniOffices has financed its recent acquisitions primarily
through debt and equity investments by the Company. (In conformance with
limitations under the tax laws relating to REITs, OmniOffices is structured as a
taxable "C" corporation in which the Company owns 95% of the economic interest,
but none of the voting stock.) Because the tax laws relating to REITs limit the
amount of investment by the Company in OmniOffices to 5% of the Company's total
assets (or approximately $150 million), future growth of OmniOffices likely will
be financed through third-party debt financing (some or all of which may be
guaranteed by the Company) or equity investments by others (possibly including
public investors).
Asset Optimization. As a component of its business strategy, the
Company may dispose of assets that become inconsistent with its long-term
strategic or return objectives or where market conditions for disposition are
favorable. The Company would then redeploy the proceeds of such dispositions
into other office properties (utilizing tax-deferred exchanges where possible).
Consistent with this strategy, during 1997, the Company disposed of seven
properties containing approximately 664,000 square feet for approximately $68
million in value. The Company recognized a gain of $5.4 million in conjunction
with these transactions. In addition, in January 1998, the Company disposed of
an additional property containing 267,000 square feet for approximately $78
million in value, resulting in a gain of $43.8 million. The Company also may
consider disposing of additional properties or interests in properties, some of
which may be significant. The Company, however, has agreed with SC-USREALTY to
use its reasonable efforts to dispose of properties only through tax-deferred
exchanges (and the Company also is subject to other similar restrictions with
respect to certain properties acquired by CarrAmerica Realty, L.P. and Carr
Realty, L.P.).
Recent Developments
From January 1, 1997 to March 1, 1998, the Company invested
approximately $1.3 billion ($1.099 billion in cash, the assumption of $182.8
million of debt and the issuance of $26.0 million in partnership interests
("Units")) in 95 operating properties containing approximately 7.6 million
square feet and in land held for future development which is expected to support
the development of approximately 6.7 million square feet. On certain parcels of
land acquired between January 1, 1997 and March 1, 1998, the Company developed
and placed into service five properties containing an aggregate of approximately
346,000 square feet and placed under construction 31 properties which will
contain an aggregate of approximately 2.6 million square feet. The table below
provides certain information by market regarding the operating properties
acquired between January 1, 1997 and March 1, 1998:
Purchase
Price Number of Rentable
Region/Market (in millions) Properties Square Feet
------------------------ ------------ ------------- -----------
SOUTHEAST REGION
Suburban Atlanta $ 58.8 5 626,000
Boca Raton, Florida 42.8 1 279,000
PACIFIC REGION
San Francisco Bay Area 313.3 29 2,007,000
Sacramento 34.6 8 314,000
Orange County/Los Angeles 79.8 7 489,000
San Diego 35.6 5 325,000
Suburban Portland, Oregon 9.0 1 81,000
Suburban Seattle 51.0 8 438,000
CENTRAL REGION
Suburban Chicago 92.8 6 707,000
Suburban Austin 15.6 2 171,000
Suburban Dallas 93.8 9 936,000
MOUNTAIN REGION
Suburban Salt Lake City 50.1 8 463,000
Suburban Phoenix 112.6 6 714,000
======== ===== =========
Total $ 989.8 95 7,550,000
======== ====== =========
5
The following table provides certain information regarding the
Company's acquisition of land (including land subject to options), all of which
was acquired between January 1, 1997 and March 1, 1998:
Square Feet Future
Under Buildable
Region/Market Construction Square Footage
------------------------------ ---------------- ----------------
Pacific Region:
San Francisco Bay Area 776,000(1) 254,000
Suburban Portland, Oregon --(2) 444,000
Orange County/Los Angeles -- 136,000
San Diego 182,000 156,000
Suburban Seattle 279,000 286,000
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Subtotal 1,237,000 1,276,000
---------- ---------
Mountain Region:
Southeast Denver -- 128,000
Suburban Salt Lake City 50,000 193,000
Suburban Phoenix 137,000 350,000
---------- ---------
Subtotal 187,000 671,000
---------- ---------
Central Region:
Suburban Dallas 607,000 740,000
---------- ---------
Subtotal 607,000 740,000
---------- ---------
Southeast Region:
Suburban Washington, D.C. 322,000 --
Downtown Washington, D.C. -- 221,000
Boca Raton, Florida 188,000 388,000
Tampa, Florida -- 202,000
Suburban Atlanta 76,000 216,000
---------- ---------
Subtotal 586,000 1,027,000
---------- ---------
TOTAL 2,617,000 3,714,000
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(1) Excludes Baytech Business Park which was purchased in 1997 and
placed in service in January 1998.
(2) Excludes RadiSys II which was purchased in 1997 and placed in
service in December 1997.
Capital Transactions
During the fourth quarter of 1997, the Company raised aggregate net
proceeds of $246 million. The Company sold 6,000,000 depositary shares of Series
C Cumulative Redeemable Preferred Stock in October 1997, and 2,000,000
depositary shares of Series D Cumulative Redeemable Preferred Stock in December
1997, from which the Company raised net proceeds of $145 million and $48
million, respectively. In addition, the Company sold 1.8 million shares of its
common stock to two unit investment trusts and a concurrent sale to SC-USREALTY
in December, 1997, from which the Company raised net proceeds of $53 million.
The net proceeds of these offerings were used to acquire the suburban office
properties and land described above, to fund develpoment costs and to pay down
indebtedness under the Company's unsecured credit facility.
In February 1998, the Company sold seven-year and ten-year senior
unsecured notes in an offering that raised net proceeds of approximately $198
million. The net proceeds were used to acquire the suburban office properties
and land described above, to fund development costs, to pay down indebtedness
under the Company's unsecured credit facility, and to pay certain costs related
to certain related hedging contracts.
FORWARD-LOOKING STATEMENTS
Certain statements contained herein involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of the Company or industry results to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among others, the
following: national and local economic, business and real estate conditions that
will, among other things, affect demand for office properties, availability and
creditworthiness of tenants, the level of lease rents and the availability of
financing for both tenants and the Company, adverse changes in the real estate,
including, among other things, competition with other
6
companies, risks of real estate acquisition and development (including the
failure of pending acquisitions to close and pending developments to be
completed on time and within budget), governmental approvals, actions and
initiatives, and environmental/safety requirements.
Directors of the Company
The directors of the Company are divided into three classes, with
approximately one-third of the directors elected by the stockholders annually.
As of March 1, 1998, the Board of Directors of the Company consisted of the
following persons:
Oliver T. Carr, Jr., 72, has been the Chairman of the Board of
Directors of the Company since it commenced operations in February 1993. In May
1997, Mr. Carr resigned as Chief Executive Officer, a position he had since
February 1993. Mr. Carr's term as a director of the Company expires at the 1999
Annual Meeting of Stockholders. Mr. Carr founded the Company's predecessor, The
Oliver Carr Company, in 1962 and since that time has been its Chairman of the
Board and a director. In addition, Mr. Carr had served as President of The
Oliver Carr Company from 1993 to the present. He was Chairman of the board of
Trustees of The George Washington University from July 1988 to June 1995. Mr.
Carr is the father of Thomas A. Carr and Robert O. Carr. Mr. Carr is a member of
the Executive Committee and the Investment Committee of the Board of Directors.
Thomas A. Carr, 39, has been President and a director of the Company
since February 1993. Mr. Carr's term as a director of the Company expires at the
1998 Annual Meeting of Stockholders. In May 1997, Mr. Carr was appointed Chief
Executive Officer of the Company. Mr. Carr was the Company's Chief Operating
Officer from May 1995 to May 1997 and the Company's Chief Financial Officer from
February 1993 to May 1995. Mr. Carr was President of Carr Partners, Inc., a
financial services affiliate of The Oliver Carr Company, from 1991 until Carr
Partners, Inc. ceased operations in February 1993. Prior to that time, Mr. Carr
was Vice President of Suburban Development and Regional Development Partner for
Maryland beginning in 1985. Mr. Carr is a member of the National Association of
Real Estate Investment Trusts (NAREIT), a member of International Development
Research Council CRE 2000 Research project (IDRC), a director of Lafayette
Square Investments, Inc. and a director of The Oliver Carr Company. Mr. Carr
also serves as a director and officer of certain subsidiaries of the Company,
including as Chairman of the Board of Directors of OmniOffices. Mr. Carr holds a
Masters degree in Business Administration from Harvard Business School and a
Bachelor of Arts degree from Brown University. Mr. Carr is a member of the
Executive Committee and the Investment Committee of the Board of Directors. In
addition, Mr. Carr is a member of management's Operating Committee and
Investment Committee.
Andrew F. Brimmer, 71, has been a director of the Company since
February 1993. Dr. Brimmer's term as a director of the Company expires at the
1999 Annual Meeting of Stockholders. He has been President of Brimmer & Company,
Inc., an economic and financial consulting firm, since 1976. Since 1995, Dr.
Brimmer has served as the chairman of the District of Columbia Financial Control
Board. Dr. Brimmer was a member of the Board of Governors of the Federal Reserve
System from 1966 through 1974. He is also the Wilmer D. Barrett Professor of
Economics at the University of Massachusetts-Amherst. Dr. Brimmer serves as a
director of BlackRock Investment Income Trust, Inc. (and other affiliated
funds), E.I. du Pont de Nemours & Company, Navistar International Corporation,
Borg-Warner Automotive, Inc. and Airborne Express. Dr. Brimmer received a
Bachelor of Arts and a Masters degree in Economics from the University of
Washington and holds a Ph.D. in Economics from Harvard University. Dr. Brimmer
is a member of the Audit Committee of the Board of Directors.
A. James Clark, 70, has been a director of the Company since February
1993. Mr. Clark's term as a director of the Company expires at the 1998 Annual
Meeting of Stockholders. He has been Chairman of the Board and President of
Clark Enterprises, Inc., a Bethesda, Maryland-based company involved in real
estate, communications, and commercial and residential construction, since 1972.
Mr. Clark is a member of the University of Maryland Foundation, and serves on
the Board of Trustees of The Johns Hopkins Board of Medicine. He is also a
member of the PGA Tour Golfcourse Properties Advisory Board, an Advisory
Director of Lockheed Martin Corporation and a director of Potomac Electric Power
Company. Mr. Clark is a graduate of The University of Maryland. Mr. Clark is a
member of the Executive Committee, Executive Compensation Committee, Investment
Committee and Nominating Committee of the Board of Directors.
7
Todd W. Mansfield, 40, has been a director of the Company since
November 1997. Mr. Mansfield filled a vacancy for a directorship whose term
expires at the 2000 Annual Meeting of Stockholders. Mr. Mansfield has been
Managing Director of Security Capital (U.K.) Management Limited since May 1997.
Prior to that time, Mr. Mansfield had been with The Walt Disney Company since
May 1986, where he was Executive Vice President/General Manager of Disney
Development Company and President of The Celebration Company. Mr. Mansfield is a
director of Parking Services International (an affiliate of SC-USREALTY) and a
trustee of Urban Growth Property Trust (an affiliate of SC-USREALTY). Mr.
Mansfield also is a director of OmniOffices. Mr. Mansfield received his Masters
in Business Administration from Harvard University and his Bachelor of Arts from
Claremont McKenna College. Mr. Mansfield is a member of the Executive
Compensation Committee of the Board of Directors.
Caroline S. McBride, 44, has been a director of the Company since July
1996. Ms. McBride's term as a director of the Company expires at the 1998 Annual
Meeting of Stockholders. Ms. McBride is a Managing Director of Security Capital
Global Strategic Group, an affiliate of SC-USREALTY. From January 1995 to June
1996, Ms. McBride was the director of private market investments for the IBM
Retirement Fund and from January 1992 to January 1995, she was the director of
real estate investments for such fund. Prior to joining the IBM Retirement Fund
in 1992, Ms. McBride was director of finance, investments and asset management
for IBM's corporate real estate division. Ms. McBride is on the Boards of
Directors of Storage USA (an affiliate of SC-USREALTY), the Pension Real Estate
Association (PREA) and the Real Estate Research Institute. Ms. McBride received
her Masters in Business Administration from New York University and a Bachelor
of Arts degree from Middlebury College. Ms. McBride is a member of the
Investment Committee and the Audit Committee of the Board of Directors.
William D. Sanders, 56, has been a director of the Company since May
1996. Mr. Sanders' term as a director of the Company expires at the 1999 Annual
Meeting of Stockholders. Mr. Sanders is the founder and Chairman of Security
Capital Group (an affiliate of SC-USREALTY). Mr. Sanders resigned on January 1,
1990, as chief executive officer of LaSalle Partners Limited, which he founded
in 1968. Mr. Sanders is on the Boards of Directors of R. R. Donnelley & Sons
Company, SC-USREALTY, Storage USA, Inc. (an affiliate of SC-USREALTY) and
Regency Realty Corporation (an affiliate of SC-USREALTY). Mr. Sanders is a
former trustee and member of the executive committee of the University of
Chicago and a former trustee fellow of Cornell University. Mr. Sanders received
his Bachelor of Science degree from Cornell University. Mr. Sanders is a member
of the Nominating Committee of the Board of Directors.
Wesley S. Williams, Jr., 55, has been a director of the Company since
February 1993. Mr. Williams' term as a director of the Company expires at the
1998 Annual Meeting of Stockholders. Mr. Williams has been a partner of the law
firm of Covington & Burling, Washington, DC, since 1975. He was an adjunct
professor of real estate finance law at the Georgetown University Law Center
from 1971 to 1973 and is a contributing author to several texts on banking law
and on real estate finance and investment. Mr. Williams is also on the Editorial
Advisory Board of the District of Columbia Real Estate Reporter. Mr. Williams
serves on the Boards of Directors of Blackstar Communications, Inc. and its
Florida, Michigan and Oregon subsidiaries; Blackstar LLC and its Nebraska and
South Dakota subsidiaries; and the Federal Reserve Bank of Richmond. Mr.
Williams is Chairman of the Boards of Directors of Broadcast Capital, Inc. and
Broadcast Capital Fund, Inc. and is Vice Chairman of The Lockhart Companies,
Incorporated. Mr. Williams also is a member of the Executive Committee of the
Board of Trustees of Penn Mutual Life Insurance Company. Mr. Williams received a
B.A. and J.D. from Harvard University, an M.A. from the Fletcher School of Law
and Diplomacy and an L.L.M. from Columbia University. Mr. Williams is a member
of the Executive Compensation Committee of the Board of Directors.
Executive Officers and Certain Key Employees of the Company
As of March 1, 1998, the Company's executive officers and key employees
were as follows:
Brian K. Fields, 38, has been the Company's Chief Financial Officer
since May 1995. Prior to that time, Mr. Fields had served as the Company's Vice
President, Treasurer and Controller since February 1993. Mr. Fields served as
Treasurer and Controller of The Oliver Carr Company from 1990 to February 1993.
Mr. Fields serves as a director and officer of certain subsidiaries of the
Company. He holds a Bachelor of Science degree in Accounting from Virginia Tech
and is a Certified Public Accountant. Mr. Fields is a member of management's
Operating Committee and Investment Committee.
8
Kent C. Gregory, 47, has been the Company's Managing
Director--Corporate Services since July 1997. Prior to that time, Mr. Gregory
had been employed by Opus, a real estate services company, since 1993, serving
as Senior Vice President of National Accounts. He holds a Masters in Business
Administration from Pace University and a Bachelor of Arts degree in Business
Administration from St. Thomas University. Mr. Gregory is a member of
management's Operating Committee and Investment Committee.
Philip L. Hawkins, 42, has been the Company's Managing Director--Asset
Management since February 1996. Prior to that time, Mr. Hawkins had been
employed by LaSalle Partners Limited, a real estate services company, since
1982, serving as Executive Vice President, Eastern Division, Asset Management
Group since 1995, Senior Vice President, Northeast Region, Asset Management
Group from 1990 to 1994, and in other asset management positions prior to that
time. Mr. Hawkins also was a director of LaSalle Partners Limited. He holds a
Masters in Business Administration from the University of Chicago Graduate
School of Business and a Bachelor of Arts degree from Hamilton College. Mr.
Hawkins is a member of management's Operating Committee and Investment
Committee. Mr. Hawkins serves as a director and officer of certain subsidiaries
of the Company, including as a director of OmniOffices.
Robert E. Peterson, 46, has been the Company's Managing Director--
Development since August 1997 and President of CarrAmerica Development, Inc.
since January 1, 1998. Prior to that time, Mr. Peterson had been Regional
Managing Director, Southeast Region, since November 1996. Mr. Peterson has over
23 years of real estate experience. Mr. Peterson's most recent experience
includes 18 years as President of Peterson Properties, which he co-founded in
1978. Mr. Peterson is a former member of the Society of Industrial and Office
Realtors and serves on the Developer Advisory Council for the Georgia Chapter of
the National Association of Industrial and Office Parks. Mr. Peterson holds a
Bachelor of Science in Business Administration from the University of North
Carolina at Chapel Hill. Mr. Peterson is the brother of James D. Peterson. Mr.
Peterson is a member of management's Operating Committee and Investment
Committee.
Robert G. Stuckey, 36, has been the Company's Chief Investment Officer
since August 1997. Prior to that time, Mr. Stuckey had been the Company's
Managing Director--Acquisitions and Development since February 1996. Prior to
that time, Mr. Stuckey was employed by Security Capital Industrial Trust (an
affiliate of SC-USREALTY) since January 1993, serving as Senior Vice President
managing the operations of the development group since November 1994, and as
Vice President supervising acquisition due diligence from May 1993 to November
1994. Mr. Stuckey serves as a director and officer of certain subsidiaries of
the Company. Mr. Stuckey holds a Masters in Business Administration from Harvard
Business School and a Bachelor of Science in Finance from the University of
Nebraska. Mr. Stuckey is a member of management's Operating Committee and
Investment Committee.
Paul R. Adkins, 39, has been the Company's Vice President, Market
Officer for Washington, D.C. since August 1996. Mr. Adkins has been with the
Company for over 15 years, including serving as Vice President of Acquisitions
from May 1994 to August 1996. Prior to that, Mr. Adkins served in a variety of
other capacities with the Company, with over 12 years in commercial real estate
leasing. Mr. Adkins is a member of the District of Columbia's Building Industry
Association and Northern Virginia's National Association of Industrial and
Office Parks. Mr. Adkins holds a Bachelor of Arts degree from Bucknell
University.
Steven N. Bralower, 47, has been Senior Vice President of Carr Realty,
L.P., a subsidiary of the Company, since May 1996. Mr. Bralower was Senior Vice
President of Carr Services, Inc., a subsidiary of the Company, from 1993 to May
1996. He was Senior Vice President of The Oliver Carr Company from 1985 to
February 1993, where he was responsible for overseeing and directing one-half of
that Company's leasing activities in its portfolio of commercial office and
retail space. Mr. Bralower first joined The Oliver Carr Company in 1978 as a
commercial leasing agent. Mr. Bralower has been a member of the Georgetown
University Law Center adjunct faculty since 1987. Mr. Bralower holds a Bachelor
of Arts degree from Kenyon College.
9
Robert L. Brumm, 46, has been a Senior Vice President of the Company
since February 1998. Prior to that Mr. Brumm had been Vice President, Human
Resources and Administration of the Company since May 1996. From 1993 to 1996,
Mr. Brumm held the same position with Carr Services, Inc., a subsidiary of the
Company, and from March 1990 to 1993 held the same position with The Oliver Carr
Company. He is responsible for managing the Human Resources, Risk Management,
Training, and Office Management functions. He has over 20 years of experience,
including eight years with Mark Controls Corporation and five years with the
real estate division of Philip Morris, Inc. Mr. Brumm received his L.C.
Bachelors degree from California State University at Long Beach.
Robert O. Carr, 47, has been President and Chairman of the Board of
Directors of Carr Services, Inc., a subsidiary of the Company, since February
1993. Mr. Carr served as a director of the Company from 1993 until 1997. Mr.
Carr is a director of The Oliver Carr Company and, from 1987 until February
1993, served as its President and Chief Executive Officer. Mr. Carr joined The
Oliver Carr Company in 1973 and has served in a number of positions, which have
included the supervision of all development operations since 1979 and all
day-to-day company operations since 1982 as Executive Vice President. Mr. Carr
is a member of the Boards of Directors for the Greater Washington Research
Center, the Corcoran School of Art and the National Cathedral School for Girls.
Mr. Carr is also a member of the Greater Washington Board of Trade, the Urban
Land Institute and the D.C. Chamber of Commerce. Mr. Carr holds a Bachelor of
Arts degree from Trinity College.
Clete Casper, 38, has been the Company's Vice President, Market Officer
for suburban Seattle since July 1996. Mr. Casper has over 10 years of experience
in real estate and marketing. Mr. Casper's most recent experience includes one
year as a Senior Associate with CB Commercial Real Estate Group Inc., Seattle,
Washington. Prior to that, Mr. Casper was with Sabey Corporation in Seattle,
Washington, serving as Development Manager for four years and a Marketing
Associate for five years. Mr. Casper is a graduate of Washington State
University.
John J. Donovan, Jr., 54, has been a Senior Vice President of Carr
Services, Inc., a subsidiary of the Company, since February 1993. Prior to that,
Mr. Donovan was Senior Vice President of The Oliver Carr Company from 1988 to
February 1993 and was responsible for overseeing and directing one-half of The
Oliver Carr Company's leasing activities in its portfolio of commercial office
and retail space. Mr. Donovan joined The Oliver Carr Company as a commercial
leasing agent in 1976. He is a member of the Advisory Board for Jubilee
Enterprise of Greater Washington (an affiliate of Jubilee Housing and The
Enterprise Foundation). Mr. Donovan holds a Bachelor of Arts degree from
Georgetown University.
Karen B. Dorigan, 33, has been a Senior Vice President of the Company
since May 1997. Prior to that, Ms. Dorigan was the Company's Vice
President--Land Due Diligence since January 1996. Prior to that time, Ms.
Dorigan served for more than nine years in a variety of capacities in the
development business of The Oliver Carr Company, including from February 1993 to
January 1996 as a Vice President. She is a past member of the Northern Virginia
Building Industry Association's Arlington Chapter Council. Ms. Dorigan holds a
Bachelor of Science degree in Economics from the University of Pennsylvania,
Wharton School.
J. Thad Ellis, 37, has been the Company's Vice President, Market
Officer for suburban Atlanta since November 1996. Mr. Ellis has over 13 years of
experience in real estate. Mr. Ellis' most recent experience includes 10 years
with Peterson Properties, where his primary responsibility was to oversee and
coordinate leasing and property management for the management services
portfolio. Mr. Ellis is a graduate of Washington & Lee University and is
involved with the National Association of Industrial and Office Parks and
Atlanta's Chamber of Commerce and is on the Advisory Board of Black's Guide.
10
Richard W. Greninger, 46, has been Senior Vice President--Operations of
the Company since January 1998. Prior to that, Mr. Greninger had been the Senior
Vice President of Carr Services, Inc., a subsidiary of the Company, since March
1995. Prior to that time, he had been Vice President of Carr Services, Inc.
since February 1993. Mr. Greninger was with The Oliver Carr Company as Vice
President of Property Management Services from January 1992 to February 1993.
During 1994, Mr. Greninger served as President of the Greater Washington
Apartment and Office Building Association. Mr. Greninger has served as a
director of both the Institute of Real Estate Management and the Building Owners
and Managers Association. Mr. Greninger holds a Masters in Business
Administration from the University of Cincinnati and a Bachelor of Science
degree from Ohio State University.
John S. Herr, 42, has been the Company's Senior Vice President, Market
Officer for Northern California since February 1998. Prior to that time, Mr.
Herr served as the Company's Vice President, Market Officer for Northern
California since September 1996. Mr. Herr has over 13 years of experience in
real estate marketing. Mr. Herr's most recent experience includes 2 years as the
President and Chief Executive Officer of Simeon Commercial Properties in San
Francisco, California. Prior to that, Mr. Herr spent 8 years with Trammel Crow,
serving as Principal and Executive Vice President in San Francisco for two
years; Partner in Richmond, Virginia for three years, and Marketing
Representative in Washington, D.C. for four years. Mr. Herr holds a Masters in
Business Administration from Stanford University and a Bachelors degree from the
U.S. Naval Academy.
Austin W. Lehr, 36, has been the Company's Vice President, Market
Officer for Southeast Denver since July 1996. Mr. Lehr has over 11 years of
experience in real estate marketing. Mr. Lehr's most recent experience includes
four years as a Vice President with Southwest Value Partners and Affiliates in
Phoenix, Arizona. Prior to that, Mr. Lehr spent four years with Draper and
Kramer, Incorporated in Washington, D.C. as the Director of Development and
Marketing. Mr. Lehr holds a Masters of Management degree from Northwestern
University and a Bachelor of Arts degree from Williams College.
Linda A. Madrid, 38, has been the Company's Senior Vice President and
General Counsel since March 1998. Prior to that time, Ms. Madrid had been Senior
Vice President, Managing Director of Legal Affairs and Corporate Secretary of
Riggs National Corporation/Riggs Bank N.A. since February 1996 and Vice
President and Litigation Manager from September 1993 to January 1996. Prior to
that time, Ms. Madrid practiced law in several law firms in Washington, D.C. and
served as Assistant General Counsel for Amtrak. Ms. Madrid holds a J.D. from
Georgetown University Law Center and a Bachelor of Arts degree from Arizona
State University.
Dwight L. Merriman, 37, has been the Company's Senior Vice President,
Market Officer for Southern California since February 1998. Prior to that time,
Mr. Merriman served as the Company's Vice President, Market Officer for Southern
California since August 1996. Mr. Merriman has over 12 years of experience in
real estate marketing. Mr. Merriman's most recent experience includes one year
as Vice President with Security Capital Industrial Trust (an affiliate of
SC-USREALTY) in Irvine, California. Prior to that, Mr. Merriman spent 11 years
with Overton, Moore in Los Angeles, serving as the Director of Marketing--Asset
Management (Partner) for five years, the Director of Marketing--Development
(Partner) for four years and Marketing Associate for two years. Mr. Merriman
holds a Masters in Business Administration from the University of California at
Los Angeles and a Bachelors degree from the University of Southern California.
B. Thomas Miller, Jr., 36, has been an Executive Vice President of
OmniOffices, Inc., since October 1997. Prior to that Mr. Miller had been the
Company's Vice President--Acquisitions and Marketing since September 1996. Mr.
Miller has over 10 years of experience in real estate marketing. Mr. Miller's
most recent experience includes three years as Vice President of Security
Capital Investment Research Incorporated (an affiliate of SC-USREALTY). Prior to
that time, Mr. Miller spent three years as a Senior Manager with Arthur Andersen
S.C. Real Estate Services Group and two years as an Associate in Management
Advisory Services at Kenneth Leventhal & Company. Mr. Miller holds a Bachelor of
Arts degree in Finance from University of Texas at Austin.
11
Robert M. Milkovich, 38, has been the Company's Vice President, Market
Officer for suburban Phoenix, Arizona since January 1998. Mr. Milkovich has over
14 years of experience in real estate leasing. Mr. Milkovich's most recent
experience includes five years as the Assistant Vice President of Leasing for
Carr Services, Inc. a subsidiary of the Company. Mr. Milkovich holds a Bachelor
of Science in Business Administration from the University of Maryland. Mr.
Milkovich serves as President of the executive committee of The Real Estate
Group.
Gerald J. O'Malley, 54, has been the Company's Vice President, Market
Officer for suburban Chicago since July 1996. Mr. O'Malley has over 30 years of
experience in real estate marketing. Mr. O'Malley's most recent experience
includes 10 years as founder and President of G. J. O'Malley & Company, a real
estate office leasing company. Mr. O'Malley holds a Bachelors degree from Loyola
University.
Jeffrey S. Pace, 35, has been the Company's Vice President, Market
Officer for Austin, Texas since May 1997. Mr. Pace has over 12 years of
experience in real estate marketing. Mr. Pace's most recent experience was with
Trammell Crow Company as Marketing Director. Prior to that time, Mr. Pace held
the position of Marketing Representative in the Dallas and Austin markets for
Carlisle Property Company, Stockton, Luedmann, French & West and Trammell Crow
Company. Mr. Pace holds a Masters of Business Administration from the University
of Texas at Arlington and a Bachelor of Science from the University of Texas at
Austin.
James D. Peterson, 50, has been the Company's Vice President, Market
Officer for Florida since November 1996. Mr. Peterson has over 25 years of
experience in the real estate field. Mr. Peterson's most recent experience
includes three years (from 1993 to October 1996) as Vice President of Peterson
Properties with responsibility for property operations in Florida. Mr. Peterson
is involved with the National Association of Industrial and Office Parks and is
a member of Boca Raton's Chamber of Commerce. Mr. Peterson holds a Masters in
Business Administration from University of Texas at Austin and a Bachelor of
Science degree in Economics from University of North Carolina at Chapel Hill.
M. Bruce Snyder, 37, has been the Company's Vice President, Capital
Markets since December 1997. Prior to that time, Mr. Snyder had been Vice
President, Corporate Finance of Charles E. Smith Residential Realty, Inc. since
1994. Mr. Snyder held several different accounting and finance positions with
the Charles E. Smith Company, the predecessor of Charles E. Smith Residential
Realty, Inc., for 13 years. He is a member of the National Investor Relations
Institute. Mr. Snyder holds a Master of Business Administration and Bachelor of
Science in Accounting from The George Washington University.
William H. Vanderstraaten, 37, has been the Company's Vice President,
Market Officer for suburban Dallas since April 1997. Mr. Vanderstraaten has over
15 years of experience in real estate development and leasing fields. Mr.
Vanderstraaten's most recent experience includes eight years as Vice
President--New Development for Harwood Pacific Corporation in Dallas, Texas,
where his primary responsibilities were directing large scale development
projects and coordinating leasing efforts for portfolios. Mr. Vanderstraaten
holds a Bachelor of Science degree in Business Administration from Southern
Methodist University.
Debra A. Volpicelli, 33, has been the Company's Treasurer and
Controller since May 1995. Prior to that time, Ms. Volpicelli had been the
Company's Tax Manager since February 1993. Ms. Volpicelli was Tax Manager for
The Oliver Carr Company from 1990 to February 1993. Ms. Volpicelli holds a
Bachelor of Science degree in Business Administration from Georgetown University
and is a Certified Public Accountant.
Joseph D. Wallace, 34, has been the Executive Vice President of
OmniOffices, Inc. since October 1997. Prior to that time, Mr. Wallace had served
as the Company's Vice President--Building Due Diligence since January 1996 and
was responsible for supervising building acquisition due diligence. Prior to
that time, Mr. Wallace had been the Company's Vice President of Asset Management
since February 1993. Mr. Wallace was Vice President of Carr Partners, Inc. from
1990 to February 1993. Mr. Wallace holds a Bachelor of Science degree in
Commerce from University of Virginia.
12
James S. Williams, 41, has been a Senior Vice President of CarrAmerica
Development, Inc. with responsibility for oversight of all project management,
design and construction operations since October 1996. Mr. Williams rejoined the
Company after two years as Vice President of Operations of Obadwick
International. Mr. Williams' initial tenure with the Company was from 1983 to
1994, during which time he served in a variety of capacities in The Oliver Carr
Company. Mr. Williams is a guest lecturer at George Washington University. Mr.
Williams holds a Bachelor of Science degree in Business Administration from West
Virginia University.
Item 2. PROPERTIES
General. As of December 31, 1997, the Company owned interests in 248
operating office properties consisting of whole or partial ownership interests,
ranging from two to 16 stories each, located in 16 target markets across the
United States. As of December 31, 1997, the Company owned fee simple title or
leasehold interest in 240 operating office properties, controlling partial
interests in three operating office properties, and non-controlling partial
interests of 5% to 50% in five operating office properties. In addition, as of
December 31, 1997, the Company owned 40 office properties under development.
Except as disclosed in "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations Liquidity and Capital Resources,"
the Company has no immediate plans to renovate its operating office properties
other than for routine capital maintenance. The Company believes its properties
are adequately covered by insurance. The Company believes that, as a result of
its national operating system, market research capabilities, access to capital,
and experience as an owner, operator and developer of office properties, it will
continue to be able to identify and consummate acquisition and development
opportunities and to operate its portfolio more effectively than competitors
without such capabilities. The Company, however, competes in many of its target
markets with other real estate operators, some of which may have been active in
such markets for a longer period than the Company.
13
General
The following table sets forth certain information about each operating
property owned by the Company as of December 31, 1997:
Company's Net Total
Effective Rentable Annualized
Property Area Percent Base Rent(3)
Property Ownership (square feet)(1) Leased(2) (in thousands)
- -------- --------- ---------------- --------- --------------
Consolidated Properties
SOUTHEAST REGION
Downtown Washington, D.C.:
International Square (3 Properties) 100.0% 1,018,383 87.7% $28,408
1730 Pennsylvania Avenue 100.0 229,292 99.3 8,753
2550 M Street 100.0 187,931 100.0 6,305
1775 Pennsylvania Avenue (6) 100.0 143,981 99.1 3,481
900 19th Street 100.0 100,907 86.4 2,643
1747 Pennsylvania Avenue 89.7(7) 152,119 89.1 4,076
1255 23rd Street 75.0(8) 304,538 97.3 8,098
2445 M Street (14) 74.0(7) 266,902 95.0 6,849
Suburban Washington, D.C.:
One Rock Spring Plaza (6) 100.0 205,298 100.0 4,653
Tycon Courthouse 100.0 416,195 99.0 8,199
Three Ballston Plaza 100.0 302,875 99.7 7,382
Sunrise Corporate Center (formerly Reston 100.0 260,643 99.9 5,312
Quadrangle) (3 Properties)
Parkway One 100.0 87,842 100.0 1,371
Suburban Atlanta:
Veridian (22 Properties) 100.0 187,842 96.0 2,465
Glenridge 100.0 64,431 99.4 984
Century Springs West 100.0 94,766 96.7 1,457
Holcomb Place 100.0 72,823 100.0 1,147
DeKalb Tech (5 Properties) 100.0 163,159 76.2 1,124
Midori 100.0 99,900 100.0 1,745
Crestwood 100.0 88,186 96.0 1,445
Parkwood 100.0 151,020 89.7 2,436
Lakewood 100.0 80,338 98.2 1,135
Average Base
Rent Per
Leased
Property Square Foot(4) Significant Tenants(5)
- -------- -------------- ----------------------
Consolidated Properties
SOUTHEAST REGION
Downtown Washington, D.C.:
International Square (3 Properties) $ 31.80 International Monetary Fund (42%)
1730 Pennsylvania Avenue 38.44 Federal Deposit Insurance Corporation (52%)
King & Spalding (26%)
2550 M Street 33.55 Patton Boggs, LLP (86%), Pocket Communications (10%)
1775 Pennsylvania Avenue (6) 24.40 Citibank F.S.B.(81%)
900 19th Street 30.32 America's Community Bankers (29%), Lucent
Technologies (11%)
1747 Pennsylvania Avenue 38.07 Legg Mason Wood Walker (16%)
1255 23rd Street 27.33 Academy for Educational Development (18%),
Chronicle of Higher Education (16%),
Seabury & Smith (16%), Peabody & Brown (11%)
2445 M Street (14) 27.02 Wilmer, Cutler & Pickering (84%)
Suburban Washington, D.C.:
One Rock Spring Plaza (6) 22.67 Sybase (27%), Caterair (22%)
Tycon Courthouse 19.90 Siemens Rolm (19%), GSA-FINCEN (16%), Vie de France (11%)
Three Ballston Plaza 24.46 CACI (50%), Eastman Kodak (20%), Nixon & Vanderhye, PC (11%)
Sunrise Corporate Center (formerly Reston 20.41 Software AG (67%), Lucas (14%), LaFarge Corporation (11%)
Quadrangle) (3 Properties)
Parkway One 15.61 EIS International (89%)
Suburban Atlanta:
Veridian (22 Properties) 13.68 Edwards Baking Co.(17%)
Glenridge 15.37 Industrial Computer Corp. (40%), Crawford & Co. (27%)
Century Springs West 15.89 Retirement Care Associates (27%)
Holcomb Place 15.75 Prudential (24%), Intercept Holdings, Inc. (20%),
The Progeni Corp. (13%)
DeKalb Tech (5 Properties) 9.04 Lucent Technologies (21%), Moreland & Altobelli (21%)
Midori 17.46 National Consumer Services Corp. (58%), UPS (21%)
Crestwood 17.06 EBC Gwinnet Enterprises (24%), Eveready Battery Co.(13%)
Parkwood 17.98 Columbian Chemicals Company (32%)
Lakewood 14.39 Paychex (26%), ISS (25%), Hickson Corp. (23%),
Morrison's (18%)
14
Company's Net Total
Effective Rentable Annualized
Property Area Percent Base Rent(3)
Property Ownership (square feet)(1) Leased(2) (in thousands)
- -------- --------- ---------------- --------- --------------
The Summit 100.0 % 178,382 100.0% $ 2,416
Triangle Parkway (formerly Spalding 100.0 82,102 100.0 1,096
Triangle II) (3 Properties)
2400 Lake Park 100.0 99,534 98.2 1,385
680 Engineering Drive 100.0 62,154 76.1 407
Embassy Row (3 Properties) 100.0 463,846 98.7 7,101
Boca Raton, Florida:
Peninsula Plaza (formerly Lake Wyman 100.0 160,081 94.7 2,063
Plaza)
Presidential Circle 100.0 278,766 93.2 3,997
------- ---- -----
Southeast Region Subtotal 6,004,236 94.9 127,933
PACIFIC REGION
Southern California,
Orange County/Los Angeles:
Scenic Business Park (4 Properties) 100.0 139,012 100.0 1,547
Harbor Corporate Park (4 Properties) 100.0 148,747 93.0 2,033
Plaza PacifiCare 100.0 104,377 100.0 960
Katella Corporate Center 100.0 79,917 96.4 1,242
Warner Center (12 Properties) `100.0 342,866 97.3 7,716
South Coast Executive Center 100.0 160,301 94.9 3,078
(2 Properties)
Warner Premier 100.0 61,553 100.0 1,354
Westlake Corporate Center (2 Properties) 100.0 71,419 82.2 1,047
Von Karman 100.0 103,713 100.0 2,439
2600 W. Olive 100.0 145,304 100.0 3,051
Bay Technology Center (2 Properties) 100.0 107,481 100.0 1,570
Southern California,
San Diego:
Del Mar Corporate Plaza (2 Properties) 100.0 123,142 100.0 1,841
Wateridge Pavilion 100.0 62,194 100.0 886
Lightspan 100.0 64,800 100.0 1,081
Century Park II (3 Properties) 100.0 198,306 100.0 2,403
Average Base
Rent Per
Leased
Property Square Foot(4) Significant Tenants(5)
- -------- -------------- ---------------------------
The Summit $ 13.54 Unisys Corp. (73%), GE Claims Service (14%)
Triangle Parkway (formerly Spalding 13.35 OHM Remediation Services Corp. (28%), UNI
Triangle II) (3 Properties) Distribution Corp. (18%), Wakefield/Beasley & Associates (16%)
2400 Lake Park 14.16 GSA (23%), Computer Language Research (22%), United
Healthcare Services, Inc. (20%)
680 Engineering Drive 8.60 EMS Technologies (43%), Tie/Communications, Inc.
(12%), Loral Aerospace Corporation (12%)
Embassy Row (3 Properties) 15.51 Ceridian Corporation (25%), Cabot Corporation (10%)
Boca Raton, Florida:
Peninsula Plaza (formerly Lake Wyman 13.61 Motorola (16%)
Plaza)
Presidential Circle 15.39 Suncoast Savings (12%)
-----
Southeast Region Subtotal 22.45
PACIFIC REGION
Southern California,
Orange County/Los Angeles:
Scenic Business Park (4 Properties) 11.13 FHP (30%), Talbert Medical Management (29%), So. Cal
Blood & Tissue (12%)
Harbor Corporate Park (4 Properties) 14.70 Delmas (25%), Texaco Refining & Marketing (13%),
Clayton Environmental (10%)
Plaza PacifiCare 9.20 Pacificare Health Systems (100%)
Katella Corporate Center 16.12 Friendly Hills Healthcare (19%)
Warner Center (12 Properties) 23.13 El Camino Resources (18%), GSA (17%)
South Coast Executive Center 20.23 State Compensation Insurance Fund (33%)
(2 Properties)
Warner Premier 21.99 Panorama Software (34%), RSL COM, USA (27%), Paging
Network of L.A. (12%)
Westlake Corporate Center (2 Properties) 17.83 No tenant occupies more than 10%
Von Karman 23.52 Fidelity National Title Insurance (82%), Taco Bell
Corporation (18%)
2600 W. Olive 21.00 The Walt Disney Company (89%)
Bay Technology Center (2 Properties) 14.61 AMRESCO (100%)
Southern California,
San Diego:
Del Mar Corporate Plaza (2 Properties) 14.95 Peregrine Systems, Inc. (77%), Newgen Results Company (23%)
Wateridge Pavilion 14.24 Stellcom, Inc. (37%), Platinum Solutions, Inc. (19%),
Wateridge Insurance Services (18%), TCS Mortgage, Inc. (14%)
Lightspan 16.69 The Lightspan Partnership, Inc. (100%)
Century Park II (3 Properties) 12.12 San Diego Gas & Electric Co. (100%)
15
Company's Net Total
Effective Rentable Annualized
Property Area Percent Base Rent(3)
Property Ownership (square feet)(1) Leased(2) (in thousands)
- -------- --------- ---------------- --------- --------------
Northern California,
San Francisco Bay Area:
CarrAmerica Corporate Center (formerly 100.0% 949,281 100.0% $18,456
AT&T Center)(6 Properties)
Sunnyvale Research Plaza (3 Properties) 100.0 126,000 100.0 1,672
Rio Robles (7 Properties) 100.0 368,178 100.0 4,179
Valley Business Park II (formerly San 100.0 161,040 100.0 1,731
Jose Orchard Business Park - B
(6 Properties)
Bayshore Centre (formerly Orchard 100.0 195,249 100.0 2,711
Bayshore Center) (2 Properties)
Rincon Centre (formerly Orchard Rincon 100.0 201,178 100.0 1,892
Centre) (3 Properties)
Valley Centre II (formerly Orchard Office 100.0 212,082 100.0 2,385
Centre II) (4 Properties)
Valley Office Centre (formerly Orchard 100.0 68,731 100.0 1,639
Office Centre) (2 Properties)
Valley Centre (formerly Orchard Centre) 100.0 102,291 100.0 1,181
(2 Properties)
Valley Business Park I (formerly San Jose 100.0 67,784 100.0 904
Orchard Business Park - A) (2 Properties)
3745 North First Street 100.0 67,582 100.0 852
3571 North First Street 100.0 116,000 100.0 1,219
Mission Plaza (2 Properties) 100.0 102,687 100.0 1,083
North San Jose Technology Park (formerly 100.0 299,233 100.0 2,780
Fortran) (4 Properties)
Foster City Technology Center 100.0 66,869 100.0 936
(2 Properties)
150 River Oaks 100.0 100,024 100.0 1,320
Amador/Rinconada (3 Properties) 100.0 134,476 100.0 1,694
Amador III 100.0 82,944 100.0 1,138
Arroyo Center (2 Properties) 100.0 104,741 100.0 956
San Mateo I 100.0 70,000 100.0 2,394
San Mateo II and III (2 Properties) 100.0 140,675 94.8 3,346
900-910 East Hamilton (2 Properties) 100.0 351,811 60.4 3,750
Northern California,
Sacramento:
1860 Howe Avenue 100.0 97,887 94.6 1,910
University Office Park (2 Properties) 100.0 121,257 95.4 1,966
Capital Corporate Center (5 Properties) 100.0 94,670 93.5 1,404
Average Base
Rent Per
Leased
Property Square Foot(4) Significant Tenants(5)
- -------- -------------- ----------------------
Northern California,
San Francisco Bay Area:
CarrAmerica Corporate Center (formerly $ 19.44 AT&T (53%), PeopleSoft (20%)
AT&T Center) (6 Properties)
Sunnyvale Research Plaza (3 Properties) 13.27 Cadence Design Systems (68%), AEA Credit Union (27%)
Rio Robles (7 Properties) 11.35 Fujitsu (41%), KLA Instruments (31%), NEC Systems
Laboratory (23%)
Valley Business Park II (formerly San 10.75 Computer Training Academy (20%), Pericom (17%)
Jose Orchard Business Park - B
(6 Properties)
Bayshore Centre (formerly Orchard 13.88 Clarify, Inc. (51%), Alantec (49%)
Bayshore Center) (2 Properties)
Rincon Centre (formerly Orchard Rincon 9.40 Ontrak Systems (44%), Toshiba America Electronic
Centre) (3 Properties) (38%), Future Electronics (19%)
Valley Centre II (formerly Orchard Office 11.25 Boston Scientific (100%)
Centre II) (4 Properties)
Valley Office Centre (formerly Orchard 23.85 Bank of America (21%), Quadrep (20%)
Office Centre) (2 Properties)
Valley Centre (formerly Orchard Centre) 11.55 Seagate Technology (40%), Gregory Associates (38%),
(2 Properties) Neoparadigm Labs, Inc. (22%)
Valley Business Park I (formerly San Jose 13.33 Leybold-Heraeus (35%), Tylan General (17%), Arcom
Orchard Business Park - A) (2 Properties) Electronics (15%)
3745 North First Street 12.60 Comdisco, Inc. (100%)
3571 North First Street 10.51 Sun Microsystems, Inc. (100%)
Mission Plaza (2 Properties) 10.55 Intel Corp (62%), Deskin Research (38%)
North San Jose Technology Park (formerly 9.29 AG Associates (38%), Reply Corp. (27%), Elexsys
Fortran) (4 Properties) International (22%), Novellus Systems (13%)
Foster City Technology Center 14.00 Nortel Communications System (46%), Storybook
(2 Properties) Heirlooms (30%), Genomyx, Inc. (20%)
150 River Oaks 13.20 Seiko-Epson Corporation (100%)
Amador/Rinconada (3 Properties) 12.60 Vanstar Corporation (100%)
Amador III 13.72 Pacific Bell Corporation (100%)
Arroyo Center (2 Properties) 9.13 Hexcel Corporation (53%), TOPCOM America Corporation (47%)
San Mateo I 34.20 Franklin Resources (100%)
San Mateo II and III (2 Properties) 25.08 Franklin Resources, Inc. (37%), Peoplesoft/Red Pepper (20%)
900-910 East Hamilton (2 Properties) 17.66 Apple Computer, Inc. (50%), Philips Electronics (10%)
Northern California,
Sacramento:
1860 Howe Avenue 20.61 Transamerica Information (31%), Anytime Access, Inc.
(19%), GSA (19%), TIG Insurance Company (12%)
University Office Park (2 Properties) 17.00 State Lands Commission (26%), Western Buyers (10%)
Capital Corporate Center (5 Properties) 15.85 Vision Services Plan (31%), Capital Center Investors (29%)
16
Company's Net Total
Effective Rentable Annualized
Property Area Percent Base Rent(3)
Property Ownership (square feet)(1) Leased(2) (in thousands)
- -------- --------- ---------------- --------- --------------
Suburban Portland:
RadiSys Corporate Headquarters 100.0% 80,525 100.0% $ 822
RadiSys II 100.0 45,655 100.0 614
Suburban Seattle:
Redmond East (10 Properties) 100.0 398,030 98.9 4,603
Willow Creek (formerly Data I/O) 100.0 96,179 100.0 981
Canyon Park Business Center (6 Properties) 100.0 246,565 100.0 3,243
Canyon Park Commons (formerly Tract 17) 100.0 95,290 100.0 1,358
--------- ----- -------
Pacific Region Subtotal 7,278,046 97.1 107,367
CENTRAL REGION
Austin, Texas:
Great Hills Plaza 100.0 135,333 100.0 2,155
Balcones Center 100.0 75,761 80.2 940
Park North (2 Properties) 100.0 132,923 88.4 1,775
City View Centre (formerly The Settings) 100.0 132,647 95.8 2,136
(3 Properties)
Tower of the Hills (2 Properties) 100.0 171,157 98.1 2,332
Suburban Chicago:
Parkway North (2 Properties) 100.0 508,749 95.7 7,982
Unisys (2 Properties) 100.0 355,386 96.0 5,792
The Crossings (2 Properties) 100.0 296,624 91.6 4,668
Bannockburn I & II (2 Properties) 100.0 209,860 100.0 3,248
Bannockburn IV 100.0 108,470 98.7 1,681
Summit Oaks 100.0 91,601 89.8 1,367
Dallas, Texas:
Greyhound 100.0 92,890 100.0 845
Search Plaza 100.0 151,176 95.3 2,408
Quorum North 100.0 113,420 80.1 1,471
Quorum Place 100.0 176,260 91.9 2,413
Average Base
Rent Per
Leased
Property Square Foot(4) Significant Tenants(5)
- -------- -------------- ----------------------
Suburban Portland:
RadiSys Corporate Headquarters $ 10.21 RadiSys Corp. (100%)
RadiSys II 13.46 RadiSys II Corporation (100%)
Suburban Seattle:
Redmond East (10 Properties) 11.70 Mosaix, Inc. (21%), Incontrol, Inc. (17%), Edmark
Corp (15%), Genetic Systems (14%), Trigon Packaging (10%)
Willow Creek (formerly Data I/O) 10.20 Data I/O Corporation (100%)
Canyon Park Business Center (6 Properties) 13.15 Cellpro Inc. (27%), Board of Regents of UWA (22%),
Federal Express (13%), ITT Educational Services (11%)
Canyon Park Commons (formerly Tract 17) 14.25 Microsoft (100%)
-----
Pacific Region Subtotal 15.19
CENTRAL REGION
Austin, Texas:
Great Hills Plaza 15.92 First USA Management, Inc. (48%), Blue Cross (24%),
Skjerven Morrill, Machpherson (13%), Businesssuites (12%)
Balcones Center 15.47 Medianet (37%), Austin Diagnostic Clinic (15%), Amil
International Ins.(11%)
Park North (2 Properties) 15.11 CSC Continuum Inc.(28%)
City View Centre (formerly The Settings) 16.81 Holt, Rinehart & Winston (78%), Barter Exchange (13%)
(3 Properties)
Tower of the Hills (2 Properties) 13.89 Texas Guaranteed Student (67%)
Suburban Chicago:
Parkway North (2 Properties) 16.39 Fujisawa USA (27%), Alliant Foodservice (23%), Baxter
Healthcare Corporation (13%)
Unisys (2 Properties) 16.97 Unisys (21%), PNC Mortgage (14%), Sears Logistical (14%)
The Crossings (2 Properties) 17.17 Allstate Ins. Co (13%), Abercrbomei & Kent (11%)
Bannockburn I & II (2 Properties) 15.48 IMC Global (38%), Deutsche Credit Corp. (36%)
Bannockburn IV 15.70 Open Text (35%), Abbott Laboratories (11%), NY Life
Insurance (10%)
Summit Oaks 16.61 GSA (18%), BMG Music (14%), Master Printer Credit
Union (14%), National Truck Leasing Suite (12%)
Dallas, Texas:
Greyhound 9.10 Greyhound Lines (100%)
Search Plaza 16.72 Basic Capital Management (34%)
Quorum North 16.19 Digital Matrix Systems (20%), HQ Dallas Quorum North
(14%), ElectronicTransmissions (10%)
Quorum Place 14.91 VHASouthwest, Inc. (22%), Objectspace (16%)
17
Company's Net Total
Effective Rentable Annualized
Property Area Percent Base Rent(3)
Property Ownership (square feet)(1) Leased(2) (in thousands)
- -------- --------- ---------------- --------- --------------
Cedar Maple Plaza (3 Properties) 100.0% 112,185 96.1% $ 1,923
Tollhill East & West (2 Properties) 100.0 238,808 90.1 3,106
Two Mission Park 100.0 76,933 85.6 832
------ ---- ---
Central Region Subtotal 3,180,183 93.9 47,074
MOUNTAIN REGION
Southeast Denver:
Harlequin Plaza (2 Properties) 100.0 327,711 98.0 4,720
Quebec Court I & II (2 Properties) 100.0 287,041 100.0 2,887
Greenwood Center 100.0 75,866 75.6 971
Quebec Center (3 Properties) 100.0 106,849 97.7 1,467
Panorama Corporate Center I 100.0 100,542 98.7 2,019
JD Edwards 100.0 189,087 100.0 2,716
Phoenix, Arizona:
Camelback Lakes (2 Properties) 100.0 199,029 99.8 3,414
Pointe Corridor IV 100.0 178,373 93.2 2,739
Highland Park 100.0 78,019 87.5 1,129
The Grove at Black Canyon (formerly Cigna 100.0 103,304 91.7 1,833
Healthcare)
US West (4 Properties) 100.0 532,506 100.0 8,129
Salt Lake City, Utah:
Sorenson Research Park (5 Properties) 100.0 285,144 99.1 3,262
Wasatch Corporate Center (formerly Draper
Park North) (3 Properties) 100.0 178,098 100.0 1,961
------- ----- -----
Mountain Region Subtotal 2,641,569 97.6 37,247
--------- ---- ------
TOTAL CONSOLIDATED PROPERTIES: 19,104,034 $ 319,621
---------- ---------
WEIGHTED AVERAGE 95.9%
----
Average Base
Rent Per
Leased
Property Square Foot(4) Significant Tenants(5)
- -------- -------------- ----------------------
Cedar Maple Plaza (3 Properties) $ 17.84 Fidelity National Bank (12%)
Tollhill East & West (2 Properties) 14.44 Digital Equipment Corporation (22%)
Two Mission Park 12.64 Bland Garvey and Taylor (16%)
-----
Central Region Subtotal 15.76
MOUNTAIN REGION
Southeast Denver:
Harlequin Plaza (2 Properties) 14.70 Travelers Insurance (21%), Bellco First Federal
Credit Union (12%)
Quebec Court I & II (2 Properties) 10.06 Time Warner Communications (45%), Alert Centre (37%),
TCI Digital Satellite (17%)
Greenwood Center 16.93 General Motors Corp. (33%)
Quebec Center (3 Properties) 14.05 Gordon Gumeeson & Associates (12%), Walberg & Dagner (11%)
Panorama Corporate Center I 20.34 Teleport Communications Group (70%), Sprint Spectrum, LP (11%)
JD Edwards 14.36 JD Edwards (100%)
Phoenix, Arizona:
Camelback Lakes (2 Properties) 17.19 Vanguard Group (38%), Humana Health Plan (14%)
Pointe Corridor IV 16.47 Jostens Learning Corp (26%), Aetna Life Insurance
Company (22%), Jennifer Loomis Associates, Inc. (16%)
Highland Park 16.54 Mastering Computers, Inc. (26%), Ryland Group, Inc. (17%)
The Grove at Black Canyon (formerly Cigna 19.36 Cigna Healthcare of Arizona (81%)
Healthcare)
US West (4 Properties) 15.27 US West Business Resources (100%)
Salt Lake City, Utah:
Sorenson Research Park (5 Properties) 11.55 Foundation Health Corp (24%), Matrix Marketing, Inc. (22%),
Datachem Laboratories, Inc. (20%), Dayna Communications,
Wasatch Corporate Center (formerly Draper Inc. (14%), ITT Educational Services (12%)
Park North) (3 Properties) 11.01 Advanta Financial Corp (28%), Times Mirror Training,
----- Inc. (23%), Fonix Corp. (14%), Keytex Corp (14%),
Novus Credit Services, Inc. (12%)
Mountain Region Subtotal 14.44
-----
TOTAL CONSOLIDATED PROPERTIES:
WEIGHTED AVERAGE $ 17.44
--------
18
Company's Net Total
Effective Rentable Annualized
Property Area Percent Base Rent(3)
Property Ownership (square feet)(1) Leased(2) (in thousands)
- -------- --------- ---------------- --------- --------------
Unconsolidated Properties
Downtown Washington, D.C.:
1717 Pennsylvania Avenue 50.0% (9) 184,446 99.3% $ 6,254
AARP Headquarters 24.0 (10) 477,187 100.0 16,780
Bond Building 15.0 (11) 162,097 100.0 4,714
Willard Office/Hotel 5.0 (12) 242,787 98.8 9,255
Suburban Washington, D.C.:
Booz-Allen & Hamilton Building 50.0 (13) 222,989 100.0 3,307
---------- ----- -----
TOTAL UNCONSOLIDATED PROPERTIES: 1,289,506 $ 40,310
--------- -------
WEIGHTED AVERAGE 99.7 %
----
ALL OPERATING PROPERTIES
TOTAL: 20,393,540 $359,931
========== ========
WEIGHTED AVERAGE 96.2 %
====
Average Base
Rent Per
Leased
Property Square Foot(4) Significant Tenants(5)
- -------- -------------- ----------------------
Unconsolidated Properties
Downtown Washington, D.C.:
1717 Pennsylvania Avenue $ 34.15 MCI Telecommunications (57%)
AARP Headquarters 35.17 American Association of Retired Persons (99%)
Bond Building 29.08 General Services Administration - Dept of Justice (93%)
Willard Office/Hotel 38.60 Vinson & Elkins (27%), Hale & Dorr (17%)
Suburban Washington, D.C.:
Booz-Allen & Hamilton Building 14.83 Booz Allen & Hamilton (100%)
-----
TOTAL UNCONSOLIDATED PROPERTIES:
WEIGHTED AVERAGE $ 31.35
--------
ALL OPERATING PROPERTIES
TOTAL:
WEIGHTED AVERAGE $18.35
======
- --------------
(1) Includes office and retail space but excludes storage space.
(2) Includes space for leases that have been executed and have commenced as
of December 31, 1997.
(3) Total annualized base rent equals total original base rent, including
historical contractual increases and excluding (i) percentage rents,
(ii) additional rent payable by tenants such as common area
maintenance, real estate taxes and other expense reimbursements, (iii)
future contractual or contingent rent escalations, and (iv) parking
rents.
(4) Calculated as total annualized base rent divided by net rentable area
leased.
(5) Includes tenants leasing 10% or more of rentable square footage (with
the percentage of rentable square footage in parentheses).
(6) The Company owns the improvements on the property and has a leasehold
interest in all or a portion of the underlying land.
(7) The Company holds a general and limited partner interest in a
partnership that owns the property.
(8) The Company holds a 50% joint venture interest in the joint venture
that owns this property and a 50% joint venture interest in another
joint venture, which holds the remaining 50% interest in the joint
venture that owns the property. As a result of preferential rights to
annual distributions from another venture, the Company will receive
distributions of less than 75% (but in no event less than 50%) of the
total amount distributed with respect to this property in each year
until the preferential distribution requirements are satisfied, but
will receive 100% of any subsequent distributions during the year until
its aggregate distributions equal 75% of the cumulative distributions
with respect to the property since inception of the partnership.
Thereafter, the Company will receive 75% of the distributions made
during the year with respect to the property. Upon sale of the
property, the Company will receive 75% of the distributions until the
Company receives its preference amount, 50% until the remaining
venturer receives its preference amount, and 75% of the distributions
thereafter.
(9) The Company holds a 50% interest in the limited liability company that
owns the property and serves as the entity's managing member.
(10) The Company holds an effective 24% interest in the property by virtue
of a 48% general partner interest in a partnership that owns a 50%
general partner interest in the property.
(11) The Company holds an effective 15% interest in the property by virtue
of a 30.6% limited partner interest in a partnership that has a 49%
limited partner interest in the property.
(12) The Company holds an effective 5% interest in the property by virtue of
a 7.85% limited partner interest in a partnership that owns a 63.7%
limited partner interest in the property. The partnership in which the
Company holds an interest owns the improvements on the property and has
a leasehold interest in the underlying land.
(13) The Company holds a 50% joint venture interest, and is the managing
partner.
(14) The property was disposed of in January 1998.
19
Occupancy, Average Rentals and Lease Expirations. As of December 31,
1997, 95.9% of the aggregate net rentable square footage in the 243 operating
office properties whose results are consolidated in the financial statements of
the Company was leased. The following table sets forth the percent leased and
average annualized rent per leased square foot (excluding storage space) for
office and retail space combined for the past five years for the operating
office properties that were consolidated for financial statement purposes at
each of the dates indicated:
Average
Percent Annualized Rent Number of
Leased at Per Leased Consolidated
December 31, Year End Square Foot (1) Properties
------------ ------------ ---------------- ------------
1997 95.9% $ 19.38 243
1996 93.6 19.37 159
1995 93.5 27.36 13
1994 95.9 32.48 11
1993 95.5 34.35 9
- ---------------------
(1) Calculated as total annualized building operating revenue, including
tenant reimbursements for operating expenses and excluding parking and
storage revenue, divided by the total square feet, excluding storage,
in the building under lease at year end.
The following table sets forth a schedule of the lease expirations for
leases in place as of December 31, 1997 in each of the next ten years beginning
with 1998 and thereafter for the 243 operating office properties whose results
are consolidated in the financial statements of the Company, assuming that no
tenants exercise renewal options:
Net Annual Percent of
Rentable Area Base Rent Total Annual
Number of Subject to Under Base Rent
Year Tenants With Expiring Expiring Represented
of Lease Expiring Leases (1) Leases by Expiring
Expiration Leases (square feet) (in thousands) Leases
---------- ------------ ------------- -------------- ------------
1998 384 3,239,000 $ 55,393 17.3%
1999 266 1,891,000 31,932 10.0
2000 219 2,519,000 42,895 13.4
2001 193 2,255,000 34,239 10.7
2002 142 2,065,000 38,629 12.1
2003 59 1,436,000 22,535 7.1
2004 33 1,159,000 25,245 7.9
2005 25 557,000 10,146 3.2
2006 31 1,059,000 21,499 6.7
2007 18 1,154,000 18,674 5.8
2008 and thereafter 12 996,000 18,434 5.8
- ----------------------
(1) Excludes 774,000 square feet of space that was vacant as of December 31,
1997.
20
Building and Lease Information. The following table sets forth certain
information for the 243 operating office properties that were consolidated for
financial statement purposes regarding leases that commenced during the year
ended December 31, 1997, excluding leases for office properties that were
executed prior to the date of acquisition of such properties:
Calculated on a Weighted Average Basis
Operating Properties, ----------------------------------------------------------------------
Downtown Tenant Base
Washington, D.C. Improvements Rent Leasing
(10 Properties) Total & Cash per Lease Abatements Commission
Square Allowances per Square Life